Legal Business

‘Our team has delivered’: Clifford Chance nears £2bn revenue as PEP breaks £2m barrier

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Financial Results 2021/22 Clifford Chance

Clifford Chance has become the second Magic Circle firm to post encouraging 2021/22 financials, announcing today (19 July) an 8% rise in revenue to £1.969bn.

Partnership profit and profit per equity partner (PEP) were both similarly encouraging. Profit swelled by 9% to £783m, while PEP passed £2m for the first time, reaching £2.04m after a 10% increase.

At a regional level, all areas saw growth to varying degrees. APAC and the Middle East were the areas which that the biggest improvement, both posting a 14% increase in income, while Continental Europe and the Americas recorded a more modest 5%. The UK practice saw a solid 7% increase.

The figures will offer encouragement to global managing partner Charles Adams, who is still getting his feet under the table after being elected in December last year.

Adams credited his predecessor for the buoyant numbers, commenting: ‘Our team has delivered another outstanding year of results. We are seeing the positive outcome of our long-term strategic focus to diversify our client base, continually increase our market share and grow in priority geographies such as the Americas. These results are a testament to Matthew Layton’s leadership as the previous global managing partner, as well as the energy, dedication, teamwork and phenomenal expertise of all our colleagues. It is because of this that, profit per equity partner increased by 10% year on year to in excess of £2m.’

The long-term profitability figures are particular point of pride for the firm. Partnership profit has jumped by 74% since 2015, while PEP has spiked by 82%. Over the same period, revenues have increased by 42%. Chief financial officer Patrick Glydon expanded on the strategy that has seen long-term improvements in profitability, stating: ‘During Covid we adopted a very clear focus on discretionary cost management as well as staying very close to our clients. And we’ve continued maintaining that discipline. That’s been the key driver of that margin improvement.’

Looking to the future, a pragmatic Adams emphasised a need for vigilance: ‘As we observe the evolving geopolitics in a number of regions, the appalling Russian military aggression in Ukraine, as well as the global economic headwinds linked with the impact of inflation and supply chain fragility, it is critical we remain agile and ready to embrace change as well as act when needed.’

The financials come as the firm settles down following a shake-up of senior roles. Last week, Sarah Jones was promoted to global head of corporate, having previously led the corporate group in the Americas, while Emma Matebalavu became sole head of global financial markets. Steve Jacoby was also appointed regional managing partner for Continental Europe.

The re-shuffle also included the creation of two new leadership roles. Singapore projects specialist Nicholas Wong was appointed clients, markets and products partner and Jessica Littlewood has taken up a position as global operations and business transformation partner alongside her existing role as head of the European CLO practice.

The latest results make interesting reading when compared to those unveiled by Magic Circle peer Allen & Overy last week. CC was not quite able to match A&O’s revenue growth, which came in at 10%, though A&O’s overall revenue was a hair lower than its rival at £1.94bn. Both firms recorded a 9% profit rise, though A&O has the edge in absolute terms, reaching £900m.

Where CC was able to stride out in front is in the PEP figures. A&O could not match its rate of growth, posting a slower 3% rise to £1.95m.

charles.avery@legalease.co.uk

Legal Business

City talent tussle continues as CC matches Freshfields with £125k NQ salary

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Salaries Clifford Chance

Clifford Chance’s (CC) next cohort of newly qualified associates will take home £125,000 per year, after the firm bumped its starting salary by 16% to match that of Magic Circle rival Freshfields.

It is the first pay rise at the firm since November 2021, when a 7.5% increase brought salaries up to £107,500. Trainee rates have not been similarly altered however, with the first-year package staying at £50,000, rising to £55,000 in the second year.

The salary hike, which will take effect from the summer when the next batch of NQs are due to arrive, sees the firm match remuneration offered at Freshfields, which announced its own salary increase at the beginning of April.

The move means CC joins Freshfields at the head of the pack among the Magic Circle. Slaughter and May, having announced another 7% salary increase last month after three separate increases in 2021, sits in third place, offering novice lawyers £115,000. Allen & Overy and Linklaters bring up the rear, offering £107,500 packages.

Although it is now leading among its London-led peers, CC still has some way to go to match many of its rivals from across the pond. Akin Gump tops the list, having announced a new rate of £164,000 last month, ahead of Gibson Dunn (£161,700), Goodwin (£161,500), Davis Polk and Fried Frank (both £160,000).

charles.avery@legalease.co.uk

Legal Business

Deals Yearbook 2022: Katherine Moir, Clifford Chance – partner since 2016

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M&A Clifford Chance

Why did you decide to become an M&A lawyer?
For the buzz, the teamwork, strategic problem solving, and intensive client contact – the opportunity to really embed relationships through a deal.

Legal Business

Clifford Chance makes up 17 City partners in largest promotion round since 2007

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Partnership promotions Clifford Chance

Clifford Chance (CC) has promoted 37 lawyers to the partnership including 17 in the City, making it the latest Magic Circle firm to announce increased partner rounds in 2022.

All of the Magic Circle firms saw a jump in partner promotions this year, including the typically conservative Slaughter and May, which made up eight lawyers, an increase from five in 2021. Meanwhile, Allen & Overy’s 39-strong promotion round globally – including 13 in London – marks a step up from 30 last year. Linklaters promoted 41, up from 35 in 2021 and Freshfields Bruckhaus Deringer minted 27 compared with 22 last year.

The investments will be viewed as a reaction to market forces which have seen many firms across the Square Mile struggle to keep up with ramped up client demand since the onset of the pandemic, as well as being a statement of intent as competition for star lawyers continues unabated.

At CC, the promotions, which take effect next month, reflect the firm’s sustained push in private equity, funds and real estate investors, with 34 of the cohort working with financial investor clients. In 2021, work for financial investor clients made up 33% (£612m) of the firm’s revenue, up from 26% (£355m) in 2015. Global senior partner Jeroen Ouwehand (pictured) claims that the new round is also the firm’s most diverse. Women made up 41% of the cohort while 23% of the 21 new partners across the UK and US who have disclosed ethnicity identify as non-white. Ouwehand said that the promotions ‘embody our uncompromising pursuit of excellence, and our ambitious goals to build a law firm where everyone can see they have a fair chance to reach the top of the profession.’

At Linklaters and Freshfields, women also made up 41% of the firms’ respective partner promotions for 2022. The percentage of incoming female partners at Allen & Overy was 36% while at Slaughter and May, litigator Megan Sandler was the only woman promoted.

Outside of the Magic Circle, Herbert Smith Freehills was among the other City firms which have announced bumper promotion rounds this week, with 34 added to the partnership across its global network — the largest cohort in the firm’s history.

Any message from the Magic Circle of such investment in the talent pipeline must of course be applauded, but one can’t help but feel vaguely disconcerted by the ever more frequent comparisons of 2022 with 2007.

megan.mayers@legalease.co.uk 

Legal Business

Financials 2020/21: ‘Strongest-ever quarter’ rescues revenue growth at Clifford Chance

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Financial results 2020/21 Clifford Chance

Clifford Chance had a late flurry of transactional activity to thank for a respectable set of Covid financials, as profit per equity partner climbed 9% and revenue inched up by 1%.

The firm’s PEP reached £1.85m, up on last year’s £1.69m, while revenue hit £1.828bn from £1.803bn. There was also an 8% uptick in partnership profit, growing to £716m from £666m.

Managing partner Matthew Layton (pictured) attributed the growth to the firm’s ‘strongest-ever quarter’ at the tail end of the financial year. He told Legal Business: ‘We saw the transactional side come back very strongly at the end of the year. In terms of signs going forward, our deal pipeline for the first few months of next year is looking very good. Demand levels are very high, it’s more than just nine months of work squeezed into three months.’

Despite the promising buying activity, the firm’s contentious practices were less fruitful this year, which is somewhat unexpected given the often-countercyclical nature of disputes. Layton said: ‘It’s more just a timing issue. The pipeline looks strong at the moment. Investigations require people to travel, it’s a lot harder to do that remotely. In 2008 there was hiatus in disputes as people dealt with their immediate priorities and then litigation came out in the following  12 to 18 months. There will be pandemic-related disputes.’

While the firm’s UK revenue was up by a robust 9%, overall there were mixed results at an international level. Continental Europe was up 2% in local currency terms, but the Americas region suffered a 2% drop, while Asia Pacific and the Middle East were down 5% and 6% respectively. A standout from the firm’s previous set of  results was a 13% uptick in US revenues, which makes this this year’s reverse all the more notable.

Layton reflected: ‘To some extent this was also a timing issue. We had a very robust performance in London with its strong financial sector, and this was the same in Continental Europe. America came off a very strong year last time, and there were a couple of areas impacted by the pandemic. There were restrictions on transport into the Latin America region and difficulty accessing government infrastructure, as well as a significant hit to the aviation sector.’

In terms of client work, a highlight was its role advising Pfizer on its agreement to co-develop a Covid vaccine with BioNTech. The firm also advised on a series of heavyweight tech IPOs, including the Hut Group’s £1.88bn float, the largest in London since 2015 at the time of listing.

Tom.baker@legalbusiness.co.uk

Legal Business

Legal Business Awards 2020 – Corporate Team of the Year

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Legal Business Awards 2020 Clifford ChanceGibson, Dunn & Crutcher

The entries have been assessed, the shortlists have been drawn up and our panel of general counsel judges have had their say: we are now delighted to reveal the winner of Corporate Team of the Year for the 2020 Legal Business Awards.

The successful firm in this category demonstrated excellence during 2019 in M&A or corporate work, including disposals, joint ventures and equity capital markets listings. It was not so much the value of the deal that impressed judges as much as evidence of outstanding transactional advice and commitment to the client in the context of one exceptional piece of work

 

 

 

Sponsored by

Winner – Clifford Chance

Fortitude was the order of the day for Clifford Chance (CC)’s City corporate team as it defied the odds by successfully defending Provident Financial against an unsolicited offer by Non-Standard Finance (NSF), despite its shareholders holding more than 50% of Provident’s shares.

The 14-week defence was prompted by ‘an old school hostile approach’ in the form of a Friday morning voicemail to Provident’s chairman minutes before the surprise bid was launched.

CC rallied the troops across public M&A, finance, debt capital markets, antitrust, employment, incentives, pensions, forensic accountants and litigation. Twists and turns saw firm and client pick apart NSF’s strategy, developing and road-testing an aggressive Regulatory News Service campaign and engaging with stakeholders, including Woodford and Invesco, both of which supported the takeover. The team launched a comprehensive defence, anticipating and handling a litany of tricky code points and managing a white knight process.

NSF then announced it had formal acceptances of more than 50% enabling it to declare the offer unconditional. However, Provident persevered with a full-on counter-attack. Analysis of NSF’s business and accounts revealed some dividends and buy-backs were unlawful, which Provident announced to the market, undermining its attacker’s management.

Provident persuaded the Takeover Panel to extend the offer timetable to allow the Competition and Markets Authority (CMA) to complete its review and determine whether a Phase 2 referral was required. Without the extension, Provident shareholders risked the takeover closing and Provident and NSF businesses being held separate pending a CMA decision.

NSF set a drop-dead date of 5 June and Provident continued analysing NSF’s regulatory capital position and undermining it with announcements and engaging with regulators. The tide started to turn as institutional shareholders made the unusual move of publicising their opposition to the takeover.

Provident showed that NSF could be left with a significant non-assenting minority and the combined Provident-NSF group would be undercapitalised at closing. On the eve of the drop-dead date, NSF announced that the takeover offer would lapse as the regulator had not concluded its change of control approval.

Against what has been called the biggest hostile takeover since the financial crisis, the defence may go down in history as one of the best ever.

Highly Commended – Gibson, Dunn & Crutcher

Gibson, Dunn & Crutcher’s City team’s advising UK pharmaceuticals company Amryt Pharma on its highly complex acquisition of Boston-based Aegerion Pharmaceuticals out of Chapter 11 within a very tight timeframe.

The team, led by Nigel Stacey and Sian Williams, was mandated in March 2019 and the acquisition was announced just two months later. The transaction involved US Chapter 11 proceedings, a court-sanctioned scheme of arrangement to create a new holding company of the Amryt group and took the form of a reverse takeover under the AIM and Euronext Dublin rules. It required a UK Takeover Code Rule 9 whitewash, given the level of Aegerion creditor control over Amryt on completion of the deal. Aegerion emerged from bankruptcy in October 2019 at which stage the acquisition was completed.

Other nominations

Herbert Smith Freehills

Representing Virgin Atlantic on its much-publicised takeover of Flybe, the UK’s largest regional airliner at the time, as part of the Connect consortium with Cyrus Capital Partners and Stobart Group.

Mayer Brown

The firm’s London office represented Canada-based FTSE 250 company Entertainment One on its £3.3bn sale to the US toy maker Hasbro, a cross-border deal that encountered a number of hurdles.

McDermott Will & Emery

Advising Praxair on the divestment of certain North American and South American assets, which were ultimately acquired by Messer and CVC Capital Partners for $3.6bn, allowing Praxair and Linde to consummate their all-share merger of equals.

White & Case

Representing Energean Oil & Gas on the $750m acquisition of the upstream exploration and production assets of Italian utilities company Edison, Energean’s first major acquisition since being listed in London in 2018.

Legal Business

Legal Business Awards 2020 – Private Equity Team of the Year

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Legal Business Awards 2020 Clifford ChanceWeil, Gotshal & Manges

After much back-and-forth between the judges in a keenly contested category, we are now delighted to reveal the winner of Private Equity Team of the Year for the 2020 Legal Business Awards.

The winner in this category demonstrated an ability to land the most significant mandates in an incredibly competitive market for private equity-backed deals. Judges looked for evidence of an ability to move with the market and stand out from competitors in the most eye-catching transactions.

 

 

Sponsored by

Investec

Winner – Weil, Gotshal & Manges

Weil’s vaunted London private equity team won plaudits for advising Bain Capital on its £3.2bn acquisition from WPP of a 60% stake in global data, insights and consulting company Kantar.

The deal was symbolic of a market that saw US money pile into UK assets, with the weakness of sterling attracting continued interest from sponsors, even as Brexit threatened to put off investors.

In July 2019 the Weil team, led by partner Marco Compagnoni, advised Bain on the acquisition and financing, coordinating input from finance, IP/IT, tax, antitrust, and Weil lawyers in the US, Germany and France. The deal saw WPP retain a 40% equity stake in London-headquartered Kantar and called for the Weil team to offer strategic advice on all aspects of the deal, including due diligence, M&A, shareholder arrangements, carve-out and bank/bond financing.

Particularly complex was the carve-out and separation, legally and operationally, of Kantar from the WPP group.

Kantar has around 350 legal entities, many of which are not wholly-owned by WPP, meaning that various shareholder, regulatory and works council processes needed to be followed to extract them.

Kantar shares its IT infrastructure with WPP, which is outsourced to IBM under a long-term arrangement. The team was instrumental in negotiating the outsourcing arrangement required to continue this post-completion. Weil won accolades from WPP for its ‘approach and ability to see the real value issues’ and the ‘top tier advice, strategically as well as technically’ that it provided to Bain Capital.

The financing of around $3bn of EUR and USD loans and bonds required complex negotiations and bespoke provisions. The 11 banks started with a range of views and through lengthy negotiations, the Weil team brought them to a consensus on the approach that worked for Bain and WPP.

 

Highly Commended – Clifford Chance

Clifford Chance impressed the judges with its advice to longstanding client KIRKBI, the investment vehicle owned by Lego’s founding family, on its consortium with Blackstone and pension fund CPPIB to acquire Merlin Entertainments. The all-cash, £6bn deal involved KIRKBI becoming the largest shareholder in the consortium, with a 50% stake.

The offer valued Merlin, Europe’s number one and the world’s second-largest visitor attractions operator, at £4.77bn, with CC leading on the scheme of arrangement leading to the successful offer and shareholder arrangements, which took into account each consortium member’s investment objectives and strategic interests.

The CC London team was led by private equity partner Simon Tinkler and M&A partners Steven Fox and Tim Lewis. It also included antitrust partner Alex Nourry.

Other nominations

Debevoise & Plimpton

Acting for TPG on its takeover of the assets of the Abraaj Group’s $1bn Global Healthcare Fund, after the assets fell into limbo as the Middle East fund collapsed amid mismanagement and corruption allegations.

Freshfields Bruckhaus Deringer

Advising CVC on its £200m minority equity investment in Premiership Rugby, a deal crucial to top-tier English rugby clubs, many of which are unprofitable, and which came under intense scrutiny from numerous stakeholders.

Fried, Frank, Harris, Shriver & Jacobson

An active fund formation team that helped raise over $150bn in 2018 alone, representing 30% of all private capital funds raised globally. It recently advised Permira on the launch of Permira VII, which closed with €11bn of commitments.

Kirkland & Ellis

Representing a consortium consisting of Apax, Warburg Pincus, Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan, on the $3.4bn take-private of the British satellite operator, Inmarsat.

Taylor Wessing

Advice to Standard Chartered Bank on divesting its private equity business via a £790m MBO to Affirma Capital, a new PE firm set up for the purposes of the disposal, backed by ICG Strategic Equity.

Legal Business

Legal Business Awards 2020 – Finance Team of the Year

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Legal Business Awards 2020 Baker McKenzieClifford Chance

After much back-and-forth between the judges in this keenly contested category, we are now delighted to reveal the winner of Finance Team of the Year for the 2020 Legal Business Awards.

The winner of this award operates at the cutting edge of the finance industry and has provided one standout example of work taken from a wide range of disciplines, including bank lending, acquisition finance, structured finance, project finance and debt capital markets.

 

 

Sponsored by

Cantab Asset Management

Winner – Clifford Chance

Clifford Chance (CC)’s advice to NatWest Markets on the first bond switch from Libor to Sonia turned the heads of judges, not least as it saw Associated British Ports (ABP) become the first sterling borrower to switch its floating rate bonds over to the new rate.

CC laid claim to being ‘uniquely placed’ to advise the solicitation agent on this novel deal due to its membership of the Bank of England’s working group on risk-free rates, not to mention its work in the Euro legal working group on Libor reform. From such a favourable position in the market, CC has subsequently advised a number of oher issuers and agents on the restructuring of Libor-linked bonds to reference Sonia.

The transaction saw CC’s winning team, led by Paul Deakins, advise the solicitation agent, NatWest Markets, as the UK’s biggest port operator successfully delivered a consent solicitation process on £65m floating-rate notes due 2022 – flipping to Sonia – the rate chosen by regulators to replace Libor – by the end of 2021.

ABP was the first company to amend legacy debt accordingly and establish a model for other issuers to follow. The change in interest basis was intended to minimise risks of value transfer for both the borrower and investors, and no consent solicitation fee was paid to investors.

ABP has exposure to Libor across a range of financial instruments including revolving credit facilities, term loans, US private placements, interest rate swaps, cross-currency swaps and listed bonds. In September 2018 the company started exploring a possible restructuring of its Libor-linked floating rate notes and held discussions with interested investors on the proposed methodology prior to the public launch of the consent solicitation.

As the transaction was the first of its kind, ABP made the legal documentation freely available to the market so that others could follow suit, and the fact that the pricing approach has been used in a number of sterling deals since is testament to its quality.

Highly Commended – Baker McKenzie

A pioneering attitude was the order of the day for the Bakers team as it advised Saudi shopping mall giant Arabian Centres Company on its $748m IPO, the first-of-its-kind in Saudi Arabia with a full international offering, including an offering into the US under Rule 144A.

The team, jointly led by Robert Eastwood and Karim Nassar of the equity capital markets group of legal advisers in Riyadh and EMEA head of capital markets Adam Farlow in London, had to draw on all its resources to tackle regulatory challenges with novel legal solutions and innovative problem-solving.

With an implied market capitalisation of $3.3bn, not only was this Saudi Arabia’s biggest IPO since 2015, it claims to have included the largest-ever syndicate of banks of any Saudi IPO, including several international banks that had never before had a role in that market.

The independent financial adviser described Bakers as ‘absolutely instrumental’ in obtaining Capital Market Authority approval and making the deal happen.

Other nominations

Dechert

Representing Kazakhstan’s national rail company on a bond issue that was groundbreaking on several levels, including being the first corporate bond listed on the Astana International Exchange and the first combined offering document for dual-listed securities under its rules.

Hogan Lovells

Advising the International Finance Corporation and the City of Belgrade on a landmark PPP project to redevelop the city’s existing waste management infrastructure, the first project of its kind in Serbia.

Shearman & Sterling

Acting for the joint venture company Trivium Packaging on a $2.85bn bond offering, the proceeds of which would be used to finance the creation of the JV out of a combination of Exal Corporation and Ardagh Group’s Metal Food & Specialty Packaging businesses.

Simmons & Simmons

Advising Mantos Copper on a comprehensive $250m financing package to expand production at its Mantos Blancos copper mine in Chile. The deal featured three facilities that were based on offtake contracts, the largest of which was a $150m senior secured facility from the Glencore subsidiary, Complejo Metalurgico Altonorte.

White & Case

Advising The Co-operative Bank Finance on a £200m bond issue to help support the Co-op Bank, the first time a high-street lender successfully issued MREL-eligible debt under new bank capital adequacy requirements.

Legal Business

Guest comment: Corporate values mean nothing without cost – City law’s moment has come to champion diversity

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Diversity Clifford Chance

An institution’s values and commitment to inclusion are only real when tested. It is in challenging times that we decide whether we embrace those values and these are the defining moments that ultimately prove their worth. Amid a global pandemic, political upheavals, the killing of George Floyd and the subsequent movement that has flowed from his death, the profession’s actions will show if our values are either luxury items to be paraded when convenient or the rock on which we build our business.

It is precisely now beset by challenges that we need to put inclusion at the heart of our decisions. Leading law firms have often waxed lyrical about commitments to diversity; now is the moment to step up if we truly believe inclusion is a core value and an economic imperative.

Clifford Chance recently announced a comprehensive set of inclusion targets, which aim to deliver meaningful change across gender, ethnic minorities and LGBT+ at the firm. They are not a numbers exercise where figures are picked on the whims of woke. It is about delivering a firm where the top floor looks like the front door and to help stem the drain of diverse talent quitting the law. To be a successful law firm, we need that inclusion. Diversity of thought and experience is a critical ingredient if we are serious about finding creative answers to the most complex and challenging questions our clients face.

These new targets have been announced in the middle of a global health and economic crisis because it is times like this when a firm’s values come to the fore. We take action now because it will strengthen our firm, but also because the potential impact of these crises on inclusion will be terrible if left unchecked. Covid-19 is no social leveller. We already know certain ethnicities face worse health outcomes. The impact on our education system will be disproportionately felt by the less affluent, which runs the risk of a career in law seeming beyond the reach of many. Women face the risk of a gendered economic recovery from the pandemic and are more likely to have to make choices between family and career. None of these challenges will correct themselves. They need active leadership and conscious interventions. If City law firms believe in their values, they have to be willing to champion them.

Inclusion is not a new value for the profession. The law is about justice, fairness and equity. Law firms should not be neutral players in the very system that protects these concepts. We need to lead and shape that system to uphold this identity. We need to see inclusion not as a faddish concept but a modern understanding of the foundation the law has been built on for centuries. The 16-year-olds writing law in their college applications are more likely thinking of fairness and justice than the thrills of debt restructuring and asset-backed securities. Inclusion is about returning to those values and being a bridge between the wider business community and justice system.

Building an inclusive environment also enables us to attract and retain the best talent. The job for life is long dead. With greater movement comes greater scrutiny and less institutionalisation. We are all becoming more discerning about which firm we will work for. People want to feel proud, or at the least not ashamed, of their employer. They prefer to work at an organisation that shares their values, and one of the most important measures by which people decide whether the firm is right for them is its commitment to diversity. Perhaps even more important for staff engagement is a firm’s ability to deliver on the ground what its marketing claims the institution stands for.

Unsurprisingly, smart, well-educated workers can easily tell the difference between values talked and values lived. If inclusion is put in the drawer during difficult times then businesses will deservedly lose credibility with staff and clients. When the tough times pass they will face steep barriers if they think they can play catch up and hope no-one notices.

Businesses that continue to lead on inclusion are the ones that will build great cohesion within their teams, enhance their reputation with staff and customers and strengthen credibility on all matters pertaining to their values. During this period of unprecedented challenge, we need to stand up, not sit back.

Tiernan Brady is global director of inclusion at Clifford Chance

Legal Business

CC becomes third City leader to achieve post-pandemic growth as revenues climb £110m

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Financial results 2019/20 Clifford Chance

With the coronavirus pandemic still wreaking havoc across many industry sectors, London’s legal elite has continued to buck the dire wider market with the third Magic Circle firm announcing revenue growth.

Results announced today (21 July) from Clifford Chance (CC), show the London outfit confirming robust growth in the face of the most challenging trading environment since the depths of the banking crisis. The City leader said that revenues for the 2019/20 period were up 6% to £1.803bn, up £110m on the previous year, while profits per equity partner increased 5% to £1.69m. Partnership profit for the year totalled £666m, an annual increase of 5%.

The results strikingly exceed the 4% topline growth CC achieved in 2018/19 and come despite the heavy drag of the coronavirus outbreak on the last two months of the financial year. The performance also slightly outpaces the 4% growth at CC’s old sparring partner, Allen & Overy, and compares favourably with Linklaters, which last week confirmed that its revenues for 2019/20 were up 0.7% to £1.64bn.

A standout result from the last trading period was CC’s 13% growth in the US in local currency terms (and 16% in sterling). The London firm now generates £263m from its US practice, an increase of 70% in sterling terms over the last five years. Its core London practice was the second fastest growing region in 2019/20 with revenues up 6% annually to hit £587m. CC’s total revenues have increased 34% over the last five years.

The firm also noted the continued growth in its client portfolio of private equity and alternative capital providers, with revenues from this group of much-courted institutions rising nearly 70% in five years. CC managing partner Matthew Layton (pictured) told Legal Business: ‘I take the view that [financial sponsors] will continue to be critically important as people look to rekindle economies and we’ll continue to see opportunities there.’

Key mandates for the firm included advising Telefónica on the £31bn merger of 02 and Liberty Global’s Virgin Media, acting for Pfizer on an agreement to co-develop a potential Covid-19 vaccine and advising German state development bank KfW on an emergency finance package to mitigate the impact of the pandemic.

The results will be seen as a clear win for CC but Layton noted that the outlook for the current year remained highly uncertain given that its 2019/20 figures were boosted by a strong pipeline before regional lockdowns crippled the global economy. Growth figures from top London firms accounting in sterling will also have been moderately flattered by currency movements over the 2019/20 year, though CC achieved growth in all its regions in local currency terms.

‘There are a lot of clouds on the horizon. It is difficult to see how it is going,’ he added. ‘If you look at the risk of a second wave [of Covid-19], the Brexit process, the geopolitical uncertainties around trade and a US presidential election looming, I believe it will remain challenging.’

The results nonetheless confirm earlier indications that London’s leading law firms are so far riding out the crisis in confident form, thanks in part to lessons learned during the banking crisis. As the 2020 results season gets under way, it will become clear whether smaller peers have managed the same feat.

With CC looking as well positioned as it has for more than a decade, Layton said key future priorities would be driving further progress in the US and pushing forward meaningful change on inclusion and diversity, which he dubbed ‘a passion for me’.

With his second term as managing partner up in 2022, Layton also cited the importance of succession planning, noting: ‘We’ve got some great young talent coming through.’

Barring calamity, Layton at least looks set to bow out on a high from what has traditionally been viewed as one of the toughest leadership roles in City law.

alex.novarese@legalease.co.uk

For more commentary, see: ‘After their lost decade, the current crisis should see the Magic Circle back on world-beating form’